Homebuyers are enjoying record low mortgage rates,
but must make sure they understand that there will usually be a penalty to pay
if they want to leave their deal early.

In return for securing the lower rates on the
market, borrowers are typically ‘locked in’ to their deal by lenders imposing
hefty early repayment charges. These are usually charged as a percentage of the
loan.

Early repayment charges are payable if you want to
come out of a deal early, switch lender, or make significant capital repayments
over the 10% that is typically allowed.

Only once the deal ends, and the borrower moves
onto the lender’s standard variable rate, will they be free to move without
penalty.

Early repayment charges can run into thousands of
pounds, and the earlier you want to get out of your deal, the steeper the cost
will be.

Borrowers should therefore always read their
mortgage small print carefully before signing up to any deal so they understand
the true cost of leaving that deal before it ends.

There are options available for borrowers looking
for greater flexibility. Some lenders offer deals with no early repayment
charges, which would suit those wanting to overpay their mortgage, or who think
that their circumstances might change before their deal ends.

Before committing to any mortgage deal, borrowers
should always consider their future plans and the financial impact that early
repayment charges could have.

Halifax Relaxes Interest Only Criteria

Starter Home Initiative

Fee Free Mortgages

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We are an independent family owned and run property service agency. Alistair has sold and let houses in the area since the turn of the century and has always prided himself on offering an unsurpassable quality of service and professionalism.